The bankruptcy process is designed to help creditors (persons or entities who are owed money) as well as debtors (persons or entities who owe money). And one of the powers given to creditors under bankruptcy law is the power to force a debtor into bankruptcy against the debtor’s wishes—known as involuntary bankruptcy.

Involuntary bankruptcy usually involves a group of creditors filing a bankruptcy on behalf of a debtor—usually a business—where the creditors believe the business can pay its obligations to the creditors, but is refusing to do so. Involuntary bankruptcy petitions against individuals are less common, as only affluent individuals are likely to have assets that may be used to pay the creditors. And a creditor can only file an involuntary bankruptcy case under Chapter 7 or Chapter 11—not under Chapter 12 or Chapter 13.

In New Jersey, as in all states, the bankruptcy process is governed by federal law, specifically the U.S. Bankruptcy Code. Creditors have the right to file an involuntary bankruptcy petition against a debtor under Chapter 7 or Chapter 11 when they believe the debtor is not paying debts but has the means to do so. For an involuntary bankruptcy to proceed under Chapter 7, which is liquidation, the debtor must generally have fewer than 12 unsecured creditors and the petitioning creditors must have claims totaling at least $16,750. If the debtor has 12 or more creditors, at least three creditors with unsecured claims totaling at least $16,750 must join in the petition. Under Chapter 11, which involves reorganization, there is no minimum number of creditors required to file the petition. Involuntary bankruptcies are less common against individuals, as they are typically reserved for businesses or high-net-worth individuals with substantial assets. It's important to note that involuntary bankruptcy is a complex legal process and creditors considering this action should consult with an attorney to understand the implications and likelihood of success.